IDEAS home Printed from https://ideas.repec.org/a/eee/proeco/v128y2010i1p434-444.html
   My bibliography  Save this article

An inventory system with single distributor and multiple retailers: Operating scenarios and performance comparison

Author

Listed:
  • Geng, Wei
  • Qiu, Minmin
  • Zhao, Xiaobo

Abstract

We consider a single-distributor multi-retailer inventory system in six operating scenarios for a finite horizon. Five scenarios are in decentralized control and the other one is in centralized control. Approximate dynamic programming (ADP) procedures are developed to obtain system performances for scenarios in decentralized control, and a stochastic dynamic programming approach is applied to the scenario in centralized control. The efficiency and effectiveness of ADP procedures are demonstrated by numerical results. Taking the system performance in centralized control as a benchmark, system performances in decentralized control are investigated and compared for different operating scenarios. The results provide useful insights in system planning and operations.

Suggested Citation

  • Geng, Wei & Qiu, Minmin & Zhao, Xiaobo, 2010. "An inventory system with single distributor and multiple retailers: Operating scenarios and performance comparison," International Journal of Production Economics, Elsevier, vol. 128(1), pages 434-444, November.
    • Handle: RePEc:eee:proeco:v:128:y:2010:i:1:p:434-444
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0925-5273(10)00288-4
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Hau L. Lee & Kut C. So & Christopher S. Tang, 2000. "The Value of Information Sharing in a Two-Level Supply Chain," Management Science, INFORMS, vol. 46(5), pages 626-643, May.
    2. Sven Axsäter & Kaj Rosling, 1993. "Notes: Installation vs. Echelon Stock Policies for Multilevel Inventory Control," Management Science, INFORMS, vol. 39(10), pages 1274-1280, October.
    3. Antony Svoronos & Paul Zipkin, 1988. "Estimating the Performance of Multi-Level Inventory Systems," Operations Research, INFORMS, vol. 36(1), pages 57-72, February.
    4. Gérard P. Cachon & Marshall Fisher, 2000. "Supply Chain Inventory Management and the Value of Shared Information," Management Science, INFORMS, vol. 46(8), pages 1032-1048, August.
    5. Byrne, P.J. & Heavey, Cathal, 2006. "The impact of information sharing and forecasting in capacitated industrial supply chains: A case study," International Journal of Production Economics, Elsevier, vol. 103(1), pages 420-437, September.
    6. Fernando Bernstein & Awi Federgruen, 2005. "Decentralized Supply Chains with Competing Retailers Under Demand Uncertainty," Management Science, INFORMS, vol. 51(1), pages 18-29, January.
    7. Gal-Or, Esther, 1985. "Information Sharing in Oligopoly," Econometrica, Econometric Society, vol. 53(2), pages 329-343, March.
    8. Hau L. Lee & V. Padmanabhan & Seungjin Whang, 1997. "Information Distortion in a Supply Chain: The Bullwhip Effect," Management Science, INFORMS, vol. 43(4), pages 546-558, April.
    9. Lee, Dong Joo & Jeong, In-Jae, 2010. "A distributed coordination for a single warehouse-multiple retailer problem under private information," International Journal of Production Economics, Elsevier, vol. 125(1), pages 190-199, May.
    10. Fernando Bernstein & Fangruo Chen & Awi Federgruen, 2006. "Coordinating Supply Chains with Simple Pricing Schemes: The Role of Vendor-Managed Inventories," Management Science, INFORMS, vol. 52(10), pages 1483-1492, October.
    11. Francis de Véricourt & Fikri Karaesmen & Yves Dallery, 2002. "Optimal Stock Allocation for a Capacitated Supply System," Management Science, INFORMS, vol. 48(11), pages 1486-1501, November.
    12. Esmaeili, M. & Zeephongsekul, P., 2010. "Seller-buyer models of supply chain management with an asymmetric information structure," International Journal of Production Economics, Elsevier, vol. 123(1), pages 146-154, January.
    13. Sven Axsäter & Johan Marklund, 2008. "Optimal Position-Based Warehouse Ordering in Divergent Two-Echelon Inventory Systems," Operations Research, INFORMS, vol. 56(4), pages 976-991, August.
    14. Maura P. Doyle & Christopher M. Snyder, 1999. "Information Sharing and Competition in the Motor Vehicle Industry," Journal of Political Economy, University of Chicago Press, vol. 107(6), pages 1326-1364, December.
    15. Wang, Hongwei & Guo, Min & Efstathiou, Janet, 2004. "A game-theoretical cooperative mechanism design for a two-echelon decentralized supply chain," European Journal of Operational Research, Elsevier, vol. 157(2), pages 372-388, September.
    16. Gérard P. Cachon, 2001. "Stock Wars: Inventory Competition in a Two-Echelon Supply Chain with Multiple Retailers," Operations Research, INFORMS, vol. 49(5), pages 658-674, October.
    17. Fangruo Chen & Yu-Sheng Zheng, 1997. "One-Warehouse Multiretailer Systems with Centralized Stock Information," Operations Research, INFORMS, vol. 45(2), pages 275-287, April.
    18. Lode Li, 2002. "Information Sharing in a Supply Chain with Horizontal Competition," Management Science, INFORMS, vol. 48(9), pages 1196-1212, September.
    19. Ki-Seok Choi & J. G. Dai & Jing-Sheng Song, 2004. "On Measuring Supplier Performance Under Vendor-Managed-Inventory Programs in Capacitated Supply Chains," Manufacturing & Service Operations Management, INFORMS, vol. 6(1), pages 53-72, April.
    20. Abdul-Jalbar, Beatriz & Gutiérrez, José M. & Sicilia, Joaquín, 2009. "A two-echelon inventory/distribution system with power demand pattern and backorders," International Journal of Production Economics, Elsevier, vol. 122(2), pages 519-524, December.
    21. Fangruo Chen & Awi Federgruen & Yu-Sheng Zheng, 2001. "Coordination Mechanisms for a Distribution System with One Supplier and Multiple Retailers," Management Science, INFORMS, vol. 47(5), pages 693-708, May.
    22. Mor Armony & Erica L. Plambeck, 2005. "The Impact of Duplicate Orders on Demand Estimation and Capacity Investment," Management Science, INFORMS, vol. 51(10), pages 1505-1518, October.
    23. Peter L. Jackson, 1988. "Stock Allocation in a Two-Echelon Distribution System Or "What to Do Until Your Ship Comes In"," Management Science, INFORMS, vol. 34(7), pages 880-895, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Duan, Qinglin & Warren Liao, T., 2013. "Optimization of replenishment policies for decentralized and centralized capacitated supply chains under various demands," International Journal of Production Economics, Elsevier, vol. 142(1), pages 194-204.
    2. Guerrero, W.J. & Yeung, T.G. & Guéret, C., 2013. "Joint-optimization of inventory policies on a multi-product multi-echelon pharmaceutical system with batching and ordering constraints," European Journal of Operational Research, Elsevier, vol. 231(1), pages 98-108.
    3. Hoque, M.A., 2011. "An optimal solution technique to the single-vendor multi-buyer integrated inventory supply chain by incorporating some realistic factors," European Journal of Operational Research, Elsevier, vol. 215(1), pages 80-88, November.
    4. Kevin Geevers & Lotte Hezewijk & Martijn R. K. Mes, 2024. "Multi-echelon inventory optimization using deep reinforcement learning," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 32(3), pages 653-683, September.
    5. Acar, Yavuz & Atadeniz, Sukran Nilvana, 2015. "Comparison of integrated and local planning approaches for the supply network of a globally-dispersed enterprise," International Journal of Production Economics, Elsevier, vol. 167(C), pages 204-219.
    6. Marjia Haque & Sanjoy Kumar Paul & Ruhul Sarker & Daryl Essam, 2022. "A combined approach for modeling multi-echelon multi-period decentralized supply chain," Annals of Operations Research, Springer, vol. 315(2), pages 1665-1702, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. de Kok, Ton & Grob, Christopher & Laumanns, Marco & Minner, Stefan & Rambau, Jörg & Schade, Konrad, 2018. "A typology and literature review on stochastic multi-echelon inventory models," European Journal of Operational Research, Elsevier, vol. 269(3), pages 955-983.
    2. Li, Xiuhui & Wang, Qinan, 2007. "Coordination mechanisms of supply chain systems," European Journal of Operational Research, Elsevier, vol. 179(1), pages 1-16, May.
    3. Zhu, Xiaowei & Mukhopadhyay, Samar K. & Yue, Xiaohang, 2011. "Role of forecast effort on supply chain profitability under various information sharing scenarios," International Journal of Production Economics, Elsevier, vol. 129(2), pages 284-291, February.
    4. Liang Guo, 2009. "The Benefits of Downstream Information Acquisition," Marketing Science, INFORMS, vol. 28(3), pages 457-471, 05-06.
    5. Fuqiang Zhang, 2006. "Competition, Cooperation, and Information Sharing in a Two-Echelon Assembly System," Manufacturing & Service Operations Management, INFORMS, vol. 8(3), pages 273-291, March.
    6. Li, Tian & Zhang, Hongtao, 2015. "Information sharing in a supply chain with a make-to-stock manufacturer," Omega, Elsevier, vol. 50(C), pages 115-125.
    7. Choi, Tsan-Ming & Sethi, Suresh, 2010. "Innovative quick response programs: A review," International Journal of Production Economics, Elsevier, vol. 127(1), pages 1-12, September.
    8. Axsäter, Sven & Viswanathan, S., 2012. "On the value of customer information for an independent supplier in a continuous review inventory system," European Journal of Operational Research, Elsevier, vol. 221(2), pages 340-347.
    9. Brian Mittendorf & Jiwoong Shin & Dae-Hee Yoon, 2013. "Manufacturer marketing initiatives and retailer information sharing," Quantitative Marketing and Economics (QME), Springer, vol. 11(2), pages 263-287, June.
    10. Yu, Yanan & He, Yong & Zhao, Xuan, 2021. "Impact of demand information sharing on organic farming adoption: An evolutionary game approach," Technological Forecasting and Social Change, Elsevier, vol. 172(C).
    11. Sven Axsäter & Johan Marklund, 2008. "Optimal Position-Based Warehouse Ordering in Divergent Two-Echelon Inventory Systems," Operations Research, INFORMS, vol. 56(4), pages 976-991, August.
    12. Yue, Xiaohang & Liu, John, 2006. "Demand forecast sharing in a dual-channel supply chain," European Journal of Operational Research, Elsevier, vol. 174(1), pages 646-667, October.
    13. Brian Mittendorf & Jiwoong Shin & Dae-Hee Yoon, 2013. "Manufacturer marketing initiatives and retailer information sharing," Quantitative Marketing and Economics (QME), Springer, vol. 11(2), pages 263-287, June.
    14. Xiaowei Zhu, 2017. "Outsourcing management under various demand Information Sharing scenarios," Annals of Operations Research, Springer, vol. 257(1), pages 449-467, October.
    15. Leon Yang Chu & Noam Shamir & Hyoduk Shin, 2017. "Strategic Communication for Capacity Alignment with Pricing in a Supply Chain," Management Science, INFORMS, vol. 63(12), pages 4366-4377, December.
    16. Olof Stenius & Ayşe Gönül Karaarslan & Johan Marklund & A. G. de Kok, 2016. "Exact Analysis of Divergent Inventory Systems with Time-Based Shipment Consolidation and Compound Poisson Demand," Operations Research, INFORMS, vol. 64(4), pages 906-921, August.
    17. Sainathan, Arvind & Groenevelt, Harry, 2019. "Vendor managed inventory contracts – coordinating the supply chain while looking from the vendor’s perspective," European Journal of Operational Research, Elsevier, vol. 272(1), pages 249-260.
    18. Ketzenberg, Michael E. & Rosenzweig, Eve D. & Marucheck, Ann E. & Metters, Richard D., 2007. "A framework for the value of information in inventory replenishment," European Journal of Operational Research, Elsevier, vol. 182(3), pages 1230-1250, November.
    19. Matsui, Kenji, 2021. "Buyer’s strategic demand information sharing with an upstream echelon for entry promotion," International Journal of Production Economics, Elsevier, vol. 242(C).
    20. Lode Li & Hongtao Zhang, 2008. "Confidentiality and Information Sharing in Supply Chain Coordination," Management Science, INFORMS, vol. 54(8), pages 1467-1481, August.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:128:y:2010:i:1:p:434-444. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ijpe .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.